Latest Business News
Goldman Sachs Initiates Coverage of Xpeng with a Buy Rating
Goldman Sachs Forecasts 30% Upside for Xpeng
Goldman Sachs recently initiated coverage of Xpeng, a Chinese electric vehicle maker, with a buy rating. This comes with a 12-month price target on U.S.-listed Xpeng shares at $18.10, indicating a potential 28% gain from the stock's close on Monday at $14.15. Following Goldman's bullish comment, Xpeng's stock increased by over 5% on Tuesday. The firm is confident in Xpeng's latest car, the G6 Ultra Smart Coupe SUV, and believes the market has not fully reflected its potential yet.
Positive Outlook for Xpeng's Vehicle Delivery Volume and Margins
In a note, Goldman Sachs stated that they expect Xpeng's vehicle delivery volume to regain momentum with the launch of the G6 model, leading to an improvement in margins. They also anticipate a decline in battery pricing, further contributing to margin improvement. The G6 was launched in the second quarter of this year, and deliveries have just started this month. Goldman Sachs believes that the G6 is the most competitive product released by Xpeng to date and has high potential in the market.
Xpeng Exceeds Delivery Forecast, Reports Quarterly Return to Growth
Xpeng reported a quarterly return to growth for car deliveries, surpassing its own delivery forecast. In the second quarter of 2023, the company delivered 23,205 cars, showing a 27% quarter-on-quarter rise. This positive performance indicates that Xpeng is rebounding after more than a year of declines in car deliveries. The report of exceeding delivery expectations suggests that Xpeng's business is gaining traction and recovering.
Goldman Sachs Sees Xpeng's Potential in Overseas EV Market
Goldman Sachs believes that Xpeng, as a pure EV maker in its volume ramp-up stage, can capture the overseas EV market in the long run. Currently, Xpeng prefers to sell into overseas markets through exports only, according to its latest strategy. However, the firm sees this as a strategic move that positions Xpeng well to meet the growing demand for EVs in international markets. With its competitive products and a strong presence in the Chinese electric vehicle industry, Xpeng has the potential to expand its reach globally.
Conclusion: A New Business Opportunity in the Electric Vehicle Market
The recent coverage initiated by Goldman Sachs on Xpeng, a Chinese electric vehicle maker, highlights the potential for new business opportunities in the electric vehicle (EV) market. With a buy rating and a price target indicating a significant upside, Xpeng's stock has already experienced positive growth in response. This presents an exciting prospect for entrepreneurs considering entering the EV industry.
Goldman Sachs forecasts a positive outlook for Xpeng, pointing to the expected increase in vehicle delivery volume and improved margins with the launch of the G6 model. As Xpeng's car deliveries exceeded expectations and showed a substantial quarterly rise, it indicates a resurgence in the company's business. This growth demonstrates the potential for market recovery and establishes Xpeng as a strong player in the EV market.
Furthermore, Goldman Sachs recognizes Xpeng's potential in the overseas EV market. As Xpeng focuses on exporting vehicles to meet the growing international demand for EVs, it positions itself strategically for long-term success. With competitive products and an established presence in the Chinese electric vehicle industry, Xpeng has the opportunity to expand its reach globally.
For new businesses looking to capitalize on the growing popularity of electric vehicles, partnering with or entering the EV market could be a lucrative decision. The positive outlook for Xpeng, supported by a reputable institution like Goldman Sachs, indicates a favorable trend in the industry. By offering innovative EV solutions, investing in research and development, and targeting emerging markets, new businesses can position themselves to capture a share of the growing EV market. The key lies in understanding consumer demands, leveraging technological advancements, and establishing strategic partnerships to drive success in this rapidly expanding industry.
Article First Published at: https://www.cnbc.com/2023/07/11/goldman-says-chinese-ev-maker-xpeng-can-rally-almost-30percent.html